Celgene Agrees to Acquire Gloucester Pharma for $340M Cash Upfront, $300M Later
Investors in Gloucester Pharmaceuticals have just made a bundle. The privately held biotech company in Cambridge, MA has agreed to be acquired by Summit, NJ-based Celgene (NASDAQ: CELG) for $340 million in cash, plus $300 million in future milestone payments.
Celgene expects the deal to be completed before the end of March, and to see Gloucester add to its profits as soon as 2011, the company said in a statement.
Gloucester’s value has been on the rise since it won FDA approval last month for its first marketed product. The drug, romidepsin (Istodax), was cleared for sale as a treatment for a rare malignancy of the skin known as cutaneous T-cell lymphoma. Celgene has built its empire, with 2,400 employees and a market valuation of $25 billion, by selling treatments for cancers of the blood, particularly multiple myeloma. Both companies were out in force this weekend at their most important meeting of the year with physicians who gathered at the American Society of Hematology annual meeting in New Orleans.
“We are thrilled with this transaction because of Celgene’s global leadership in the development and commercialization of innovative treatments for hematologic diseases,” said Alan Colowick, CEO of Gloucester Pharmaceuticals, in a statement.
Gloucester based its application for FDA approval of romidepsin on mid-stage clinical trials which included 167 patients and found that about 40 percent of them had their tumors completely or partially shrink after getting intravenous infusions of romidepsin. Nausea, fatigue, infections, and vomiting were the most common side effects found in patients, and were mostly mild to moderate in severity. Cutaneous T-cell lymphoma affects 1,500 people in the U.S. each year, according to the Leukemia & Lymphoma Society.
The sale of Gloucester represents a quick payoff for the venture capitalists who pumped $29 million into the company back in August in a Series D round, wagering that the company would win FDA approval. The investors were Novo A/S., Apple Tree Partners, ProQuest Investments, Prospect Venture Partners, and Rho Ventures.